Customer Service in Indian Commercial Banks
Recent banking developments in India
Vittaldas Leeladhar
The Indian banking sector has witnessed wide ranging changes under the influence of the financial sector reforms initiated during the early 1990s. The approach to such reforms in India has been one of gradual and non-disruptive progress through a consultative process. The emphasis has been on deregulation and opening up the banking sector to market forces. The Reserve Bank has been consistently working towards the establishment of an enabling regulatory framework with prompt and effective supervision as well as the development of technological and institutional infrastructure.
Persistent efforts have been made towards adoption of international benchmarks as appropriate to
Indian conditions. While certain changes in the legal infrastructure are yet to be effected, the developments so far have brought the Indian financial system closer to global standards.
Statutory Pre-emptions
In the pre-reforms phase, the Indian banking system operated with a high level of statutory preemptions, in the form of both the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR), reflecting the high level of the country’s fiscal deficit and its high degree of monetisation. Efforts in the recent period have been focused on lowering both the CRR and SLR. The statutory minimum of
25 per cent for the SLR was reached as early as 1997, and while the Reserve Bank continues to pursue its medium-term objective of reducing the CRR to the statutory minimum level of 3.0 per cent, the CRR of the Scheduled Commercial Banks (SCBs) is currently placed at 5.0 per cent of NDTL (net demand and time liabilities). The legislative changes proposed by the Government in the Union
Budget, 2005-06 to remove the limits on the SLR and CRR are expected to provide freedom to the
Reserve Bank in the conduct of monetary policy and also lend further flexibility to the banking system in the deployment of resources.
Interest
Vittaldas Leeladhar
The Indian banking sector has witnessed wide ranging changes under the influence of the financial sector reforms initiated during the early 1990s. The approach to such reforms in India has been one of gradual and non-disruptive progress through a consultative process. The emphasis has been on deregulation and opening up the banking sector to market forces. The Reserve Bank has been consistently working towards the establishment of an enabling regulatory framework with prompt and effective supervision as well as the development of technological and institutional infrastructure.
Persistent efforts have been made towards adoption of international benchmarks as appropriate to
Indian conditions. While certain changes in the legal infrastructure are yet to be effected, the developments so far have brought the Indian financial system closer to global standards.
Statutory Pre-emptions
In the pre-reforms phase, the Indian banking system operated with a high level of statutory preemptions, in the form of both the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR), reflecting the high level of the country’s fiscal deficit and its high degree of monetisation. Efforts in the recent period have been focused on lowering both the CRR and SLR. The statutory minimum of
25 per cent for the SLR was reached as early as 1997, and while the Reserve Bank continues to pursue its medium-term objective of reducing the CRR to the statutory minimum level of 3.0 per cent, the CRR of the Scheduled Commercial Banks (SCBs) is currently placed at 5.0 per cent of NDTL (net demand and time liabilities). The legislative changes proposed by the Government in the Union
Budget, 2005-06 to remove the limits on the SLR and CRR are expected to provide freedom to the
Reserve Bank in the conduct of monetary policy and also lend further flexibility to the banking system in the deployment of resources.
Interest